AI makes banking faster, easier and more personal

According to financial research firm Autonomous, artificial intelligence (AI) will introduce more than $1trillion in cost savings by 2030, representing 22 per cent of banks’ current expense load. Many banks, however, struggle to understand when and where to apply AI to their business and reap these promised benefits.

Part of the problem is that many people fear AI will steal their jobs, a rumour that has been spread by the likes of Hollywood and sci-fi novels. In reality, the true value of AI lies not in replacing workers, but in automating their most repetitive tasks.

Think about it this way: Henry Ford’s assembly line, first introduced in the US in the 1920s, saved time and money, but it also created mind-numbing jobs for millions of factory workers. Since then, US and Japanese auto manufacturers have steadily automated the assembly process with robotics, with humans functioning in primarily supervisory, technical and quality assurance roles. Time and money are still saved but with the bonus of freeing the worker to focus on using his or her higher-level skills, such as creativity and problem solving.

What does this have to do with banking? A lot, actually.

From the banker’s perspective

Consider the financial analyst who spends a tremendous amount of time keying in details from a financial statement. What he really needs is a way to remove the tedious nature of his job so he can shift his focus to a deeper analysis of the information and take action on the results. Or similarly, with a bank’s credit policy – if an organisation knows that a certain number of loans are being waived a particular number of times, with a specific type of performance, then the institution might want to remove or change the policy because it’s costing the bank. AI offers a faster and deep analysis of that broad credit policy and empowers the bank to create a change.

When financial institutions leverage AI to automate these dull, repetitive tasks, bank employees are free to focus instead on building relationships with their customers and offering superior service. After all, a personal touch is still crucial in the financial services industry, and when it comes to making those vital connections, machines simply cannot compete.

From the customer’s perspective

The banker is not the only one who benefits from AI. Customers, too, can enjoy a faster and more convenient experience that meets the higher standards set by companies such as Amazon and Uber. For example, chatbots can enhance the onboarding process when postured as helpdesk agents, answering basic questions quickly and anticipating common requests, thus eliminating unnecessary steps for both the customer and the institution.

AI can also give bankers a deeper look at their customers’ behaviours, patterns and financial history beyond basic demographics. This can help the banker suggest real-time insights and recommendations that are backed by AI capabilities, offering the right product or service at the right time. The customer feels as if their bank truly knows them, and their resulting satisfaction and loyalty is anything but artificial.

Today’s bank executives have a choice: they can stand aside as customer expectations continue to evolve and watch nimbler competitors pass them by. Or they can think strategically and plan now for how AI will help them offer new products, deliver their services more efficiently and serve their customers better.